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Bridging the financial inclusion gap in India - Peer-to-Peer Lending

For many people in India, access to formal financial services and products still remains a challenge. As per the Findex report, around 22% of Indians do not have a bank account. The lack of access to credit and other financial services limits opportunities for economic growth, especially for underserved individuals and communities. Financial Inclusion is one of the pressing issues in our country. Why? Traditional banks and financial institutions have stringent requirements of collaterals and high fees, making it difficult for low-income households and small businesses to access loans and other financial services. Not only that, very few financial products have the flexibility to be customised for the community of lenders it serves. One promising solution to this problem is peer-to-peer lending, which has the potential to democratize access to credit and empower individuals and communities across India. Here’s how -

Peer-to-peer lending, also known as P2P lending, is a form of lending that connects borrowers directly with investors through an online platform. It eliminates the need for intermediaries such as banks and financial institutions, making the lending process more accessible, efficient and affordable.

According to a Global Findex report, India has the second-largest unbanked population. This has created a gap in the financial ecosystem, leading to the emergence of a parallel system of informal lending that is often exploitative and unsustainable. There have been instances of money lenders charging interest rates as high as 120% annually - a predatory practice meant to keep the borrower trapped and unable to repay completely. The lack of credit history, collateral, and documentation requirements makes it difficult for low-income individuals like farmers, vendors, artisans and rural entrepreneurs to access formal credit, leading to a vicious cycle of debt and poverty. How it works - The lending process on a peer-to-peer platform typically involves the following steps:

  • Borrowers apply for a loan by providing personal, and financial information, as well as details on the intended use of the funds.

  • The platform assesses the borrower's creditworthiness by analyzing their credit history, income, and other factors.

  • If approved, the borrower's loan request is listed on the platform, where investors can choose to invest in all or a portion of the loan.

  • Once the loan is fully funded, the borrower receives the funds and makes repayments to the platform as per their repayment terms.

  • The platform facilitates the repayments from the borrower back to the investors.

Solution - Peer-to-peer lending platforms address this issue by leveraging technology to make credit easy to access. This allows people who would not qualify for a bank loan to access credit, to invest in their own livelihoods, education and healthcare.


At Rang De, A typical loan interest is between 4-8% tailored according to the capacity of the borrower in contrast to 36-40% levied by informal lenders, making it a more affordable option.

One of the key benefits of Rang De is that it enables lenders to invest and create an impact in the life of the borrower while earning a return on their investment. Lenders can choose to invest in loans that align with their values such as livelihood and education. This creates a positive impact on society while providing an opportunity for investors to earn a return on their investment.

Peer-to-peer lending has the potential to bridge the financial inclusion gap in India by providing access to credit to those who are excluded from the formal banking sector. Unlike platforms where sensitive data is at risk, P2P platforms use robust technology and abide by the rules of RBI making them trustworthy platforms to borrow or lend. Rang De with the help of 7000+ Social Investors has disbursed 50+ crores since September 2019. The communities of farmers, rural entrepreneurs and artisans have benefited greatly from the affordable and quick loans provided for their tailored needs. Not only that, our community of social investors have been able to enable impact with us promising transparency and accountability in all these lendings. By embracing peer-to-peer lending with Rang De Social Investors, we can all come together to create a more inclusive and sustainable financial ecosystem in India.


To start your social investing journey, visit rangde.in today and empower fellow Indians within minutes!


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